UBS says Dell Technologies’ stock is likely to lose momentum as demand for its artificial intelligence-related servers appears to be fully entrenched. The investment bank downgraded the hardware name from “buy” to “neutral.” The company raised its price target to $243 from $167, suggesting a potential downside of about 7% from Friday’s closing price. “The acceleration in demand for AI servers is largely priced in,” analyst David Vogt said in a note to clients on Sunday. “Following our strong execution over the past 12 months, the balance of risk and reward is better going forward.” Dell stock is up 172% over the past 12 months, while the S&P 500 index is up 31% over the same period. In 2026 alone, stock prices soared more than 106%, with the benchmark index up 8.1%. The company’s rise comes as large-scale language models such as Anthropic’s Claude and OpenAI’s ChatGPT embrace multimodal and multi-agent systems, increasing demand for AI processing power and capacity. This new technology revolution boosted Dell’s AI server business, which reached $13 billion in revenue in the first quarter of 2027. “Since the company announcement, several of our AI competitors have been charged with illegally exporting Nvdia GPU-based servers, so we believe NeoCloud, Enterprise and Sovereign may move future orders to Dell,” Vogt said. “However, Dell’s NTM P/E is up about 70% since the news, and while the stock is up about 70% since the news, the near-term EPS upside is more modest.Additionally, given Dell’s more neo-cloud and enterprise exposure, Dell’s customer capex should grow more slowly than hyperscaler capex given the stronger balance sheets and cash flow generation of companies like Meta, Google, Amazon, and Microsoft. UBS’s call goes against the consensus on the street. Of the 28 analysts covering Dell, 20 rate the stock as a buy or strong buy, according to LSEG data.
